A recent North Carolina Senate proposal for the ballots in November of 2014 is an amendment to remove the right to vote in North Carolina for individuals who have been determined incompetent by a court of any state. If passed into law, Senate Bill 668 will take the right to vote away from many senior citizens and individuals with disabilities who have been adjudicated incompetent by a court. (An individual’s constitutional right to vote may be granted back if a court restores their competency.)Continue Reading...
Why would an individual renounce or disclaim an inheritance in North Carolina? An inheritance may not always be expected and it may not be desirable for the beneficiary. Certain assets, like real estate or personal items, may require complicated or expensive maintenance that the beneficiary does not want to manage. An inheritance may also come with a heavy tax burden. For senior citizens, an inheritance could affect their eligibility for Medicaid benefits. Instead, a beneficiary may want another family member to receive their inheritance.Continue Reading...
A common misconception is that elder law attorneys are used primarily by senior citizens. Although elder law attorneys can assist with crisis Medicaid planning and present eligibility for Veterans’ Benefits, they can also help younger individuals make a plan in advance.Continue Reading...
April is Autism Awareness Month, Parkinson’s Awareness Month, and it is also Financial Literacy Month. These three campaigns may at first appear unrelated to each other, but they are interconnected.Continue Reading...
The “Sandwich Generation”—today’s 10 million baby boomers who care for both their own children or grandchildren and elderly parents or relatives—may need to take a different approach to estate planning. New research shows approximately 15% of baby boomers contribute financially to care and living expenses for their elderly family members. The average life expectancy is only going up and many seniors will outlive their savings. When caring for aging parents, particularly when it includes financial contributions, estate planning should include consideration of the parents’ eligibility for Medicaid long-term care coverage, Veterans benefits, the caregivers’ access to medical records, the caregivers’ authority to make medical and financial decisions for the parents, and possibly guardianship.Continue Reading...
Memory loss comes in many forms. From mild cognitive impairment and dementia, to the severe effects of advancing Alzheimer’s, the number of senior citizens affected by memory impairments is only going up. 1 in 5 Americans over the age of 70 are afflicted by some type of memory loss. Families often recognize the importance of advanced estate planning when thinking of retirement for aging Americans with a growing rate of memory impairment. However, seniors may avoid discussions about retirement planning because they are concerned about losing their independence – both financial and otherwise. By meeting with an estate planning attorney in advance, individuals can take the steps needed to help preserve the independence that most fear will be lost as they age.Continue Reading...
- North Carolina’s statutory form for a living will and health care power of attorney are valid statewide. The documents meet the requirements of North Carolina law; however, individuals are not required to exclusively use them. One can file these documents through the NC Advance Health Care Directive Registry.
- Five Wishes meets the legal requirements for an advance directive in North Carolina. In fact, it is recognized in almost every state. (The only states that do not recognize Five Wishes are Oregon, Utah, Kansas, Texas, Alabama, Indiana, Ohio and New Hampshire.) Five Wishes is a set of forms that allows one to name a person to be their health care agent, and to check boxes and write statements in response to questions about medical treatments that one may or may not want under certain circumstances.
Divorce at any age involves the sensitive matter of splitting assets and debt. For couples who divorce in their senior years (coined a “gray divorce”), not only are a lifetime’s investments subject to division, but the costs of long-term care (LTC) also become an even more important consideration. If an individual’s retirement account was compromised or investments drained by their spouse, separating and divorcing as a senior citizen may become emotionally and financially devastating.Continue Reading...
Wake Forest University's Law School is well known for its Elder Law Clinic, whose website contains a wealth of resources on elder law issues, including Basic North Carolina Information. It's helpful to do some preliminary research before talking to a lawyer about elder law issues, but there's no substitute for the advice and guidance of experienced counsel. TrustCounsel's Elder Law Attorney Kristen Burrows attended Wake Forest and was a student at the Clinic. She has dedicated her professional life to working with older adults and their families.
The Raleigh News & Observer recently commented on the surging insurance rates for long-term care insurance (LTCI) policies in North Carolina, the article for which can be read here. Yet it seems that an increased prevalence of premium hikes isn’t the biggest concern that LTCI policyholders in North Carolina might face.
LTCI partnership policies provide asset protection for policyholders who use up their plan benefits, increasing the amount of non-countable resources that the insured can retain and still receive Medicaid by the amount of LTCI benefits he or she uses. Thus, if the insured requires care beyond the benefits period provided by the LTCI plan, the state will disregard the insured’s assets dollar for dollar by the amount the LTCI policy spent during the benefits period. This feature makes partnership policies seem like an attractive option for many people as it allows them to become eligible to receive Medicaid benefits without first having to spend down their assets to the minimum amount permitted by North Carolina’s Medicaid program.
However, while many might be tempted to seek out an LTCI plan to take advantage of this treatment of assets for Medicaid, potential policyholders should be aware of North Carolina’s distinct treatment of LTCI plans for Medicaid estate recovery purposes. North Carolina statute defines “estate” for decedents who have LTCI partnership policies as “including assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement” (N.C.G.S. § 108A-70.4). Thus, unlike Medicaid recipients who did not hold LTCI partnership policies during life, the estate subject to recovery includes interests transferred to third parties during the decedent’s life as well as real and personal property passing to heirs through state probate law, either under a will or through intestacy. North Carolina residents contemplating purchasing an LTCI policy might want to consider the risk to lifetime property transfers that the policy could pose before committing to an LTCI plan.
It’s an unfortunate reality that, as people get older, they find themselves at a heightened risk of becoming victims of elder abuse. Recent studies have shown that elder abuse is an increasingly prevalent phenomenon. While elder abuse can occur in many forms, including physical and emotional abuse and neglect, elder fraud poses a particularly strong danger for many aging citizens. The 2010 “Elder Investor Fraud Survey” conducted by the Investor Protection Trust showed that one out of every five citizens over the age of 65 has fallen victim to financial fraud. A 2011 study conducted by MetLife showed that Americans over the age of 60 had been conned out of approximately $2.9 billion in 2010. Most victims fall between the ages of 80 and 89, with the majority being women.
Victims of elder fraud often find themselves at the mercy of friends or family members who take advantage of a close relationship, often by misusing a Power of Attorney or abusing credit card privileges, spending beyond permitted limits. However, as this recent article from SFGate.com shows, there is another form of elder fraud on the rise, and its effects have already been felt in the Triangle. Raleigh residents Charles and Miriam Parker, both 81 years of age, fell victim to a telemarketing fraud scheme in which the couple wound up losing tens of thousands of dollars. Taking advantage of their trust and financial needs, their abuser charmed his way into the Parkers’ lives with the promise that, upon sending money to pay for taxes, they would receive the proceeds of a multimillion dollar lottery. Over the next few years, the Parkers were persuaded to send and relay thousands of dollars and found themselves heavily in debt. For the Parkers’ children, perhaps the most frightening aspect of the Parkers’ situation was their denial of being victimized. Even after their children stepped in with law enforcement in an intervention meeting, the Parkers adhered to their belief that their “investment” soon would pay off.
The Parkers’ story sheds light on a danger that many elder citizens could face during their later years in life. While the Parkers were lucky enough to have children close-by who eventually were able to put a stop to their parents’ troubles, many elder Americans are isolated, living far away from children and other family members who could keep an eye out for their loved ones. As more instances of elder fraud continue to occur, it’s important to keep both elderly citizens and their loved ones educated about the warning signs to watch out for to avoid similar misfortune.
I recently met with a loving grandson, who needed some advice regarding his grandmother. His grandmother currently lives in another state. She was recently diagnosed and treated for cancer, but in the process was also diagnosed with dementia. She moved into an assisted living facility after her cancer surgery, and is not likely to move back home. Her only child lives here in North Carolina, and so a move to a North Carolina assisted living facility is likely the next step.
The grandmother does not have much income or assets, so paying for her care is a top concern. Before we could truly discuss options and develop a plan, though, I would need a more accurate picture of her finances. While I would need to meet with the grandmother personally to determine her legal capacity to make decisions and sign documents, I suggested that she have Powers of Attorney in which she designates who can make financial and medical decisions for her. The grandson mentioned his grandmother is hesitant to give up control, and that she’s been expressing fear and distrust lately where there was none before, possibly resulting from the dementia. He asked what happens if she doesn’t sign one, then declines to the point she can’t sign one, and the facility decides she needs someone to make decisions for her. I explained that guardianship – the court process of determining someone incompetent and appointing a decision-maker – might become necessary.
Then the grandson said, “Okay, well, do you have any tips on how to talk to her about this? How to start the conversation?”Continue Reading...
AARP has come out with a Long Term Scorecard, which ranks each of the 50 states and the District of Columbia on "Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers."
Unfortunately, North Carolina ranks in bottom 50%, at number 24 for 2011. However, NC does have a higher rating than all other southern states except for Virginia. Hopefully in coming years North Carolinians and their elected officials will work to improve our offerings to those in long-term care and their families. If you can't wait - move to Minnesota - it's ranked number one!
A recent North Carolina Court of Appeals decision affirmed the Superior Court verdict that an agent under a power of attorney did not breach his fiduciary duty to his aunt, Doris King or unjustly enrich himself at her expense. Albert v. Cowart, et al.
Even though the defendants prevailed in this case, proper advance planning by Mr. and Mrs. King would most likely have avoided the lawsuit. The use of powers of attorneys and perhaps trusts executed well in advance of incapacity, with a lawyer's counsel, does not completely avoid the possibility of litigation, but certainly reduces it considerably.
It appears that the lawyer that prepared a power of attorney for Mrs. King did so without first consulting with her. This goes against North Carolina State Bar rules, which require that an attorney must first communicate with a person before preparing legal documents for that person to sign. This helps ensure that the person signing the documents has capacity to sign the documents and is doing so willingly.
The population of elderly persons is rising throughout the country, and North Carolina is no exception. The elderly are particularly vulnerable to abuse by relatives and others - increased awareness and prevention are crucial. North Carolina begins its Elder Abuse Awareness Campaign on Mother’s Day, May 13, 2012; it ends on Father’s Day, June 17. Everyone is encouraged to wear purple ribbons to offer support for this campaign.
From the National Academy of Elder Law Attorneys email newsletter:
Identifying and preventing elder abuse was the main topic of discussion among delegates to the North Carolina Senior Legislature during its first meeting of the year. Gov. Beverly Perdue reminded the group that by 2030, more than 80 counties in the state are expected to have more people age 60 and older than those age 17 and younger. Perdue urged state legislators to consider the importance of aging services and the need to maintain funding for vital programs, specifically identifying elder abuse as a developing problem in North Carolina.
According to Dennis Streets, director of the Division of Aging and Adult Services (DAAS), the number of Adult Protective Service reports to county departments of social services increased from more than 14,000 in 2006-2007 to nearly 20,000 in 2010-2011. Currently, DAAS is working with the North Carolina Conference of District Attorneys to improve access to justice for victims of abuse, neglect, and exploitation.
Those considering long-term care insurance should be aware of recent several changes in the long-term care insurance industry. Guardian stopped offering the insurance as of December 31, 2011, and Prudential will no longer be offering individual coverage after March, 2012. MetLife exited the market at the end of 2010. In addition, John Hancock and UnumProvident are no longer offering group coverage. Consequently, underwriting is becoming more stringent.
Anyone in the market for long-term care insurance may not want to delay much longer, and should work with a long-term care professional to help ensure that they obtain suitable coverage with a financially strong company.
Note: Certain companies have "Partnership" status in North Carolina - the Partnership program allows those covered by long-term care insurance to protect the amount that will be provided by insurance from Medicaid countable assets.
Much to my surprise, I recently became aware of the following North Carolina law:
§ 14‑326.1. Parents; failure to support.
If any person being of full age, and having sufficient income after reasonably providing for his or her own immediate family shall, without reasonable cause, neglect to maintain and support his or her parent or parents, if such parent or parents be sick or not able to work and have not sufficient means or ability to maintain or support themselves, such person shall be deemed guilty of a Class 2 misdemeanor; upon conviction of a second or subsequent offense such person shall be guilty of a Class 1 misdemeanor. If there be more than one person bound under the provisions of the next preceding paragraph to support the same parent or parents, they shall share equitably in the discharge of such duty.
On its face, this law makes it a crime not to support one's parents if they are unable to support themselves. What about all those elderly persons receiving assistance from the state because they can't pay for nursing home costs themselves? It might make one think twice about assisting your parents in divesting themselves of assets in order to qualify for Medicaid. Also, it could make considering long-term care insurance that much more important - who wants their kids to get arrested, even if just for a misdemeanor?
However, on the North Carolina Bar Association's Elder Law Section list serve, there was a recent discussion of the statute and the fact that no one is aware of anyone being prosecuted for violation of the the law.
That's not surprising - even as a estate planning attorney (as opposed to a criminal attorney), I see many problems with the law. It is so vague that I do not see how it could ever stand up to challenge before a judge. How does one determine what "sufficient income" is or "reasonable providing." What about saving for one's own retirement to avoid the same problem with the next generation? What about college expenses for kids? The statute also makes no mention of assets, so apparently one could have a couple of million dollars socked away, and the statute would not apply if one's income was all used for reasonable support of one's immediate family.
Bottom line - you probably don't need to worry about N.C.G.S. Section 14-326.1. In the unlikely event you are busted for a violation, hire a good attorney. You'll probably make law by having the statute declared unconsitutional.
The 2011 Consumer Scams and Fraud booklet issued by the North Carolina Attorney General is now available. It is geared to increase awareness of and prevent fraud against seniors.
Alzheimer’s disease has really been on my radar these days. Now, I know I’m an elder law attorney, so of course it’s on my radar, but even so, the blips on the radar seem to be coming more frequently lately. I came across a study released by MetLife earlier this year that found that Alzheimer’s disease is the second most feared disease by Americans, second only to cancer. However, 62% of those polled admitted they know little or nothing about the disease.Continue Reading...
Today is National Health Care Decisions Day. Take charge of your future - talk to family, your doctor and your estate planning attorney about your wishes. Everyone age 18 or over should have a Health Care Power of Attorney, Living Will, and Authorization for Use and Disclosure of Protected Health Care Information (HIPAA Authorization). When my kids turned 18, I made sure they each had a complete estate plan, including these documents.
From guest author Raymond Lavine:
Many senior citizens freely admit that they fear growing older more than they fear death. The prospect of becoming increasingly frail and dependent in a society which worships strength and self-reliance, and of losing family and lifetime friends can understandably make the specter of old age a frightening one.
Does senior-care have to be a time of physical failing and emotional loss? Of course aging brings physical deterioration, and time brings the loss of loved ones, but senior-care can still bring growth and new awareness. Those who are emotionally, financially, and socially ready to take on the challenges of aging are the ones for whom senior care will actually bring happiness.
Baby-Boomers, and those who are following us, find that we and our families are in denial about the fact that we are growing older. This denial is counterproductive, and if you are in that situation, you have the right to confront your loved ones with the fact that you need to make plans for your later years.
There are many aspects of home care or senior living which will require input from your family; where you will live; who will manage you finances should you become unable to; and who will be responsible for seeing that you get proper medical care an transportation if you need it. If you are going to live with one of your children, clarify what you expect of the other children so that there is no resentment from the child with whom you live, who may feel overwhelmed.
The quality of your senior living will depend to a very great degree on the communicating you do with your family ahead of time. Making sure in advance that your housing, finances, medical, and social needs will be met will not only relieve you of a tremendous burden; it will bring you and your family closer together so that your years of senior care will be pleasant and enjoyable.
Senior planning also means working with your financial planners; wealth managers; attorneys; and accountants. Owning long-term care plans is helpful to provide money for long-term care needs but this and other insurance need to be coordinated with your over-all estate and financial planning.
You have goals during your working and family career and it is essential to plan your goals for your senior years. There are many talented and knowledgeable people who will assist you with planning so that fear and denial turn into positive and meaningful goals and objectives.
And let us not forget the elder advisors: attorneys; wealth managers; financial planners, accountants, mediation services, and fiduciary services; elder care workers; and transition specialists.
David Henderson was a Korean War veteran. He was discharged from active duty in 1952 due to paranoid schizophrenia. In 1992, the VA gave him a 100% disability rating, and in 2001 (while living in North Carolina) he filed a claim for supplemental benefits to help with the cost of in-home care related to his severe mental illness. His claim for disability benefits was denied, and he was given 120 days to appeal to the United States Court of Appeals for Veterans Claims (“Veterans Court”). He missed the deadline by 15 days and lost his right to appeal.
Henderson argued he was late filing his appeal because he was bedridden due to his service-related disability. The Supreme Court reviewed the case to determine whether the Veterans Court is allowed to make exceptions and extend filing deadlines for disability-related and other equitable reasons. In a unanimous decision issued on March 1, the Supreme Court Justices held that Henderson should not have automatically lost his right to appeal, and that the Veterans Court can make exceptions to the deadline for equitable reasons.Continue Reading...
The U.S. News and World Report has issued a report on the best nursing homes in America. From the website: "All of the homes shown received 5 stars, the highest overall rating, from the federal government's Centers for Medicare and Medicaid Services. A facility's overall rating is geared to its performance in health inspections, nurse staffing, and medical care. Homes are ranked in tiers according to their star ratings in the three individual areas. Within each tier, the order is alphabetical."
Here's the list for North Carolina.
Legal Aid of North Carolina has a Senior Legal Helpline for citizens age 60 and older. The toll-free number is 1-877-579-7562. Intake hours for new callers are 9:00-11:00 a.m. and 1:00-3:00 p.m. Monday through Friday. Matters covered include Housing Law, Consumer Law, Employment Law, Pubic Benefits, Alternatives to Guardianship and Wills.
One of the shortfalls of Medicaid for long-term care is that it provides financial assistance primarily for nursing homes, and I don’t need to tell you that most people prefer not to have to go into a nursing home. While Medicaid does cover some community-based in-home assistance, there are such long waiting lists that it is not a viable option for the older population. North Carolina offers a program called Special Assistance that provides financial assistance for assisted living facilities, but the program has an income cap that falls well-short of the cost of assisted living facilities, meaning that many people make too much income (even from a single Social Security check sometimes) to qualify for the assistance, yet cannot afford the private pay rate of an assisted living facility.
All this is to say that if someone needs help with some daily activities such as preparing meals, driving to the doctor, dressing or bathing, but does not have a family caregiver or the financial resources to get the level of care they need to stay at home or in an assisted living facility (or run out of money while paying for it), that may mean that Medicaid and a nursing home is the only remaining option.
The sad part about this is that the in-home care services needed to remain in the home often cost less than the nursing home. Some provisions in the federal health care reform seek to remedy this. Regardless of how you view the health care reform overall, these provisions are positive changes – they benefit both the recipients and the taxpayers. If more people who would have had to go into a nursing home and rely on Medicaid are able to stay in their home, and keeping them in their home costs taxpayers less than paying their way in a nursing home, that’s a win-win situation.
For an article summarizing the provisions in the Affordable Care Act that will address long-term care: http://www.familiesusa.org/assets/pdfs/health-reform/in-perspective/In-Perspective-Long-Term-Care.pdf
The stress of moving into a nursing home is great -- and it's compounded by the loss of freedom, dignity and privacy.
Adding to the anxiety is the fact that people moving to an elder care facility often have no choice. They may no longer be able to care for themselves without risking injury.
Family members should become advocates and observe their loved one's care and living conditions. Concerns should be discussed with the staff. And be aware that federal laws and various state laws provide nursing home residents with specific rights. For example, under the Nursing Home Reform Act, (OBRA '87) a number of protections are present, including:
Privacy and Confidentiality:
Residents can keep and use personal belongings and property as long as the items don't interfere with the rights, health, or safety of others.
The Right Choice
The Right Choice
Married couples can share a room if both spouses reside in the same facility.
Confidential medical and personal records must be made available. Residents have the right to review their medical records within 24 hours of making a request, and staff members must ask permission to release personal records to others.
Residents are allowed privacy in their rooms and during medical treatments. Privacy should also be available during telephone calls, visits and meetings with other residents. Mail should be received unopened. Residents have the right to see family members, a resident advocate, a physician, service providers, or representatives of the state or federal government.
Residents can plan their own daily activities, wear their own clothes, and participate in social, religious, and community activities that do not interfere with the rights of other residents.
Medications and treatments can be refused. Residents have the right to see their own doctors and must be informed about their conditions and medications.
Equal access to quality care must be provided, regardless of whether residents pay privately or receive Medicare or Medicaid benefits.
Residents can ask a nursing home to handle personal funds, but the facility must follow state and federal recordkeeping requirements. However, residents also have the right to manage their own finances unless a guardian or conservator has been appointed.
Notice must be received before a resident's room or roommate is changed.
Residents can refuse transfer to another room if the purpose is to move from a Medicare bed to a Medicaid bed, or vice versa. When it comes to a discharge or move for other reasons, such action must be necessary for the person's welfare; required to protect other residents; or appropriate because care is no longer needed. A move or discharge can also be made because a resident failed to pay bills or the facility is closing.
Residents must be protected from physical and mental abuse, neglect, mistreatment and misappropriation of their property. They must be allowed to stay with other residents and remain free from physical or chemical restraints except in emergencies.
Complaints about care or treatment must be allowed without punishment.
Residents must be informed about their rights. The facility must provide a written statement of rights if asked. The facility must investigate all claims of violations and report the results of the investigation to authorities if warranted. There must be a quick resolution of grievances.
North Carolina has Bills of Rights for Nursing Home Residents as well as Residents of Adult Care Homes.
One way each of us can thank the veterans in our lives is to make sure they are aware of the benefits that they have earned as a result of their service to our country. Many, if not most, veterans do not know that they have earned a very important benefit that helps veterans and their spouses pay for in-home health care, assisted living care, or nursing home care. The benefits are known as “Housebound” and “Aid and Attendance” benefits.
Millions of veterans are eligible for the benefit, yet millions of veterans are failing to take advantage of this benefit. There are 2.3 million World War II veterans, 2.6 million Korean War Veterans and 7.7 million Vietnam veterans living in this country. Approximately 9.3 million veterans are 65 and older, and 6 million veterans have a disability. Yet only 105,000 veterans were using this benefit last year.
Why are so many veterans not taking advantage of this benefit?Continue Reading...
The Orange County Dispute Settlement Center, located here in Chapel Hill, is now offering specialized mediation dealing with elder care matters. While the services of an elder law attorney and/or geriatric care manager are also advisable in most cases, mediation can help families deal with some of the disputes that may arise around elder care issues. From today's Dispute Settlement Center newsletter:
We hear a lot these days about families dealing with care for aging relatives.
Aging is a transition that poses emotional, legal and financial challenges for families. Being able to talk about the issues can be tough. Avoiding decisions can be costly. Having high conflict conversations that don't end well can hurt family relationships for a long time.
Examples of eldercare issues:
- How will we plan for our family member's future housing and care?
- Can we get past this lingering dispute over inheritance?
- How do we divide the duties of care for our aging relatives?
- How can we communicate with each other better?
We can help. Experienced mediators can assist you and your family members in having the conversations you need to have.
Elder mediation is:
- Overseen by a trained neutral; and
Brian Dooley, CPA in his International Tax Counselor's Blog, recently authored a helpful post on the use of IRS Form 56, Notice Concerning Fiduciary Relationship, for helping aging parents and others manage any issues that arise with the IRS. Form 56 is traditionally used for fiduciaries such as executors and trustees, but it can also be used to name children who will be helping their parents in the future.
Since children are not automatically fiduciaries for their parents, the person named as the fiduciary in Form 56 must be named as an agent in a durable power of attorney, and that document must be sent in along with Form 56.
The IRS Power of Attorney, Form 2848, may also be used, and does allow an immediate family member to serve as the agent with no formal fiduciary relationship. It may not be as useful for future tax years, however.
Of course, both forms must be signed while the tax payer is still competent.
The Center for Medicare Advocacy, Inc. reminds us that it’s that time of year again to make choices and change your current prescription drug plan. Plans change every year; premiums and deductibles may change; drug coverage may change; and plan providers may leave your service area. Therefore, it is absolutely necessary that beneficiaries and/or their helpers and caregivers compare different plans BEFORE the Part D Annual Election Period that starts November 15th and ends December 31st.
If you or a loved one is currently enrolled in a Private Fee for Service (PFFS) plan, it is especially important to get started reviewing options because changes from the 2008 Medicare Improvement for Patients and Providers Act (MIPPA) go into effect in 2011, and some PFFS plans have decided to leave the marketplace rather than meet the additional requirements enacted by MIPPA.
Another change to Medicare in 2011, a result of the new health care reform law, will help close the coverage gap known as the “Donut Hole.” Eligible plan members who purchase formulary drugs after reaching the Donut Hole will get a 50% discount on brand name drugs and a 7% discount on generic drugs.
Don’t be intimidated. This year, plan sponsors were required to consolidate plan offerings, so there are fewer plans and the differences between plans are more meaningful and easier to compare, and beginning October 15th, plan premiums, deductibles, co-pay amounts, formularies and formulary drug restrictions can be viewed and compared online at www.medicare.gov.
If you’d like additional assistance, North Carolina offers a Seniors’ Health Insurance Information Program (SHIIP). To find your local SHIIP office, call 1-800-443-9354, or check out their website: www.ncshiip.com.
To view the full bulletin from the Center for Medicare Advocacy Inc.: http://www.medicareadvocacy.org/InfoByTopic/PartDandPrescDrugs/10_10.07.ChoicesTimeAgain.htm
I have had a few clients who have been sold “Medicaid Friendly” Annuities. In at least one case, the annuity salesman sold the client a “Medicaid Friendly” annuity in the local senior center. I don’t know who the salesman was, or the details of his sales pitch, but what he sold the client made an extreme mess of her Medicaid eligibility.
Annuities can be an invaluable tool in Medicaid planning. When used correctly, an annuity can convert a person’s spend-down amount (excess resources) to a stream of income for the spouse at home, or, in the case of a single or widowed person, can preserve some of the spend-down amount for expenses not covered by Medicaid.
Medicaid regulations became much more strict in recent years, and the criteria that an annuity must meet to be excluded as a resource for Medicaid eligibility are very specific. They must be:
· Provide equal payments
· Name the NC Medicaid Program as beneficiary for benefits paid on behalf of the annuitant
Most of the “Medicaid Friendly” annuities being sold out there do not meet these requirements and will count against a person applying for Medicaid benefits. Often the seniors are advised by the annuity salesman that all they need to do is annuitize the annuity if and when they enter a nursing home in order to become eligible for Medicaid. This is often not true because these annuities do not meet ALL the other Medicaid requirements for them to be considered a non-countable resource.
Most annuities are simply a tax-deferred investment tool. Medicaid Compliant Annuities, on the other hand, are a very specific product offered by only a limited number of insurance agents and companies. Medicaid Compliant annuities are best used when a person knows that nursing home care is imminent and the annuity is then tailored to immediately convert the person’s spend-down amount to an income stream. So, be wary of “Medicaid Friendly” annuities being marketed to the senior community at large.
Recently, I heard a story about a family who used a reverse mortgage. The mother has Alzheimer’s but is in great physical health. The father was in good health and was caring for the mother. The son was recently out of work and decided it would be a good time to move back to help his father care for his mother. The parents recently qualified for Medicaid, but had a reverse mortgage line of credit to help in the event of emergencies. The house is worth $175,000.00 and they owe $35,000.00 on the reverse mortgage. The parents had intended to leave their estate, which consisted primarily of the house, to their son.
The father suffered a heart attack and passed away suddenly. The mother is physically “healthy as a horse,” as are many people who suffer from Alzheimer’s, and may have many years of life left. The son, however, may not be able to provide care for her for the rest of her life.
THE PROBLEM: If the mother has to go into a nursing home and is there for over a year, the reverse mortgage will be called. The mother and son, unable to repay it, will lose the house. The mortgage company will auction or sell the house and any money left over from the sale will go back to the mother, which will kick her off Medicaid. The parents’ lives of hard work to pay off their home and to have something to pass on to their loyal son may be lost in the blink of an eye.Continue Reading...
Most of what I write about relates to death, disability and taxes, and planning for those things. Pretty heavy stuff. So I'm glad to share this video with you, which features a 72 year old woman giving a hilarious deadpan testimony to growing older.
Thanks to my colleague Jennifer Garner for bringing this to my attention. Below is a picture unrelated to the video linked to above, but in keeping with the tone of this post. Enjoy!
This morning on the way to work I heard an interesting piece on National Public Radio about the use of remote video monitoring of elderly persons. There are also companies that provide less invasive methods of monitoring, such as motion detectors. While I was certainly familiar with medical alert services that call for help at the push of a button, the more sophisticated programs described in the story were new to me.
While some may be concerned about loss of privacy, such monitoring services can help provide peace of mind for spouses and children of elderly or disabled persons at a fraction of the cost of a in- home caretaker.
The article on NPR's website that I linked to above provides links to some of the businesses that provide these services.
There are numerous rules governing who is eligible for Medicaid to help pay nursing home costs. Medicaid planning involves advising clients about what those rules are and applying the rules to their financial situation. The goal of Medicaid planning is to protect the client’s rights and maximize the assets that Medicaid allows them to keep or transfer.
In the overwhelming majority of cases, the people who are coming to see me for Medicaid planning are not wealthy, and are not trying to hide money. The people who come to see me are often the spouse or family member of an elderly person who needs to enter a nursing home. The family is overwhelmed by the circumstances. They are worried about how to pay for the huge nursing home bills and how to protect the spouse who is still living at home. They are devastated by the thought that everything their spouse or parent spent their life working for and saving will be depleted by their final health care costs. They are often planning for Medicaid eligibility in order to protect the spouse who will remain at home (the “community spouse”) from becoming impoverished, and to protect some resources to help the person entering the nursing home maintain the best possible quality of life in his or her last years.
The truth is, Medicaid planning is usually the last ditch effort. How many people really think about long-term care planning? Even if they have thought about it, how many people know how to plan for it? Who knows if they’ll need it? Who knows when they’ll need it? Who knows how long they’ll need it? Who knows what level of care they’ll need? Who knows how much it will cost by the time they need it?
Moreover, in situations where someone needs nursing home care, there are often many other issues going on simultaneously. In some cases, the person entering the nursing home has either reached the point or is about to reach the point that he can no longer make his own decisions. An elder law attorney can help you navigate all of these issues to understand your rights and options, and to develop a plan to tackle the hurdles ahead.
The North Carolina Medicaid program paid a total of $52,575.14 in nursing home costs for Sallie Anthony. After Mrs. Anthony's death, Anna Thompkins, who would become the Executrix of Anthony's estate, contacted the State to inquire about its claim for the Medicaid expenditures. She then completed the probate of the Estate without paying the State. Some time later, the State filed suit against Thompkins, who defended herself by alleging that the statute of limitations had expired. The Court ruled for the State because the statute of limitations did not expressly apply to the State and, in the absence of express inclusion in the statute, the doctrine of nullum tempus occurritt regi (no time runs against the king) applies in North Carolina.
North Carolina Department of Health and Human Services v. Thompkins, 2010 N.C. App. LEXIS 1153 (July 6, 2010)
Source: July 13, 2010 NAELA eBulletin
You or someone you love may be ready for a retirement community living arrangement, which typically includes lifetime residential accommodations, meals, and some degree of medical services. These facilities can be quite expensive. The good news: Unexpected tax write-offs may help offset the cost.
The tax-saving idea is that you may be able to deduct part of the retirement community's one-time entrance fee and ongoing monthly fees as medical expenses on your Form 1040, regardless of your current health status. Since the fees we are talking about here can be quite large (see right-hand box), meaningful deductions may be possible despite the limitation on medical write-offs. (You can only deduct medical expenses to the extent they exceed 7.5 percent of your adjusted gross income.)
Court Decision Shows the Way
For recent proof that substantial deductions are possible, we can point to a 2004 Tax Court decision. Source: Delbert L. Baker v. Commissioner (122 TC 143 (2004). In 1989, Delbert Baker and his wife bought into a resort-style retirement community. It provided four living arrangement categories:
- Independent living with minimal medical services,
- Assisted living with more medical help,
- Special care (for victims of Alzheimer's and dementia), and
- Skilled nursing with maximum medical services.
The Bakers paid a one-time entrance fee of about $130,000 plus monthly fees of over $2,000 in exchange for lifetime residential and medical care privileges for both spouses. (This was back in 1989. Today's prices would be much higher in many areas.)
Genworth recently conducted a survey of the Cost of Care in North Carolina (Home Care, Adult Day Care, Assisted Living and Nursing Homes). There are comparisons of the U.S. and NC as a whole, along with the largest metro areas in the state.
I recently gave a presentation on the Legal and Contractual Aspects of Continuing Care Retirement Community (CCRC) Agreements. The talk was very popular - I planned for 40 attendees and over 140 came! I thought others might be interested in the topic - click here for the presentation handouts, which include a comparison of several local CCRCs in which I have clients.
Note: As of June 17, 2010, the handout to which I have linked contains a few corrections to the Carolina Meadows information, courtesy of Liz Rossi of Carolina Meadows.
In this North Carolina Court of Appeals case a Medicaid beneficiary was held liable for overpayment of Medicaid benefits when a newly discovered asset caused her to assets to exceed the resource limit:
Ella Mae Cloninger entered a nursing home on May 28, 2000 and her children applied for Medicaid on her behalf. When the Medicaid application was filed, the children (allegedly) did not know their mother owned two endowment life insurance policies; the existence of the policies was not disclosed. Later, as a result of class action litigation, they became aware of the policies and, in June, 2005, disclosed them to Medicaid. The policies were cashed in ($330,685) and placed in an account in Ella Mae’s name. After receiving notice of the policies, the Medicaid agency terminated Ella Mae’s benefits because she was over-resourced. The Department then determined that an over-payment was made in the amount of $142,366.44. This decision regarding over-payment was appealed. The hearing officer found that the insurance policies were available resources and affirmed the over-payment, finding “[Petitioner] liable for the repayment of all Medicaid benefits paid on [their] behalf.” On appeal, the court found that an unknown asset is not necessarily unavailable. There was no legal impediment prohibiting Ella Mae from accessing the life insurance funds; because she was over-resourced when benefits were paid, the trial court correctly determined she was liable for the overpaid amount.
Source: the 4/13/10 National Academy of Elder Law eBulletin.
For those who have been through a similar experience, this poignant article Letting Go of My Father, which details Jonathan Rauch's struggles in caring for his elderly father, will solicit empathy. For younger readers, it can provide a glimpse of things to come.
While the article does not cover the issue, the legal aspects of caring for an elderly relative can be greatly simplified by making sure a durable general power of attorney, health care power of attorney, living will and HIPAA authorization are in place early on. Once an elder becomes mentally incapacitated, it's too late.
Also, geriatric care managers can provide invaluable assistance, even when an elder is in facility, by monitoring health care, medications, etc.
Thanks to attorney Kathe Joyce for bringing the article to my attention.
This posting is courtesy of attorney Marc Soss of Florida:
The aging demographics of the United States coupled with the Pension and Recovery Act of 2006 (the "PPA”) and Deficit Reduction Act of 2007 (“DRA”) have provided an excellent planning opportunity to create tax efficient vehicles to solve a clients’ long-term care planning needs. Beginning on January 1, 2010, a tax-free planning option will become available for individuals who desire to provide for long-term medical care by utilizing an existing annuity or life insurance contract purchased after 1996. While not a new concept (it dates back to 1997), the 2010 tax-free planning opportunity may be beneficial to an individual with a larger than needed life insurance policy death benefit, unaffordable monthly or annual premiums, an under-performing or matured deferred annuity contract, or the desire to incorporate long-term medical care into his or her estate plan.
North Carolina's elderly are particularly vulnerable to financial fraud and scams. Check out the the North Carolina Department of Justice's website, which has helpful information for people of all ages to help protect themselves from identity theft, scams, and other crimes. If you have an elderly family member without access to a computer, please print the information and discuss it with them.
Even attorneys are being scammed these days, so it pays to be vigilant!
The North Carolina Center for Public Policy Research just issued a press release with the results of a study indicating that North Carolina needs to do more to protect its senior citizens against fraud. The Center also provided recommendations on what could be done to improve the current situation, including implementing new laws to require bank employees to report financial abuse against elderly customers.
Click "Continue Reading" for a list of signs that a senior may have been defrauded.
Listen to this Podcast on the ElderLawAnswers website.
Nursing home coverage for veterans is available from two sources within the Department of Veterans Affairs -- the veterans health care system and the state veterans homes system.
Nursing Home Coverage through the VA Health Care System
Nursing home coverage along with other long term care services such as home care and assisted living as well as geriatric care management are available through the Veterans Health Administration for qualifying veterans.
In order to get into the veterans health care program, the veteran must have service-connected disabilities, or be below a qualifying income level or be receiving Veterans Pension income. Once in the system, veterans are not guaranteed long term care services, including nursing home care, unless they meet specific requirements. Here is a list of these requirements for nursing home coverage.
A recorded version of the National Academy of Elder Law Attorneys (NAELA)'s public webcast "Aging in
The Housing and Economic Recovery Act of 2008 more than doubled the home value (now up to $417,000) to be used nationwide for establishing the size of loans available from the federal reverse mortgage program. Loan origination fees were also lowered.
A reverse mortgage allows persons over age 62 to get lines of credit or cash payments based on the equity in their homes. Repayment is not required as long as borrowers remain in their homes. Reasons for obtaining a reverse mortgage include paying off an existing mortgage, paying property taxes and getting cash to pay for daily living expenses.
The National Academy of Elder Law Attorneys (NAELA) will be offering its first ever public Webcast on October 30, 2008. Aging in America: How to Plan for it is a one-hour roundtable discussion program video recorded and broadcast "live" via the Internet. Streamed at NAELA.org on October 30 at 1:00 pm ET, the free Webcast will be moderated by AARP's Wil Stoner and include NAELA panelists Bernie Krooks and Ron Fatoullah.
Click here for free registration.
Services from care managers should be something that every family takes advantage of, but in reality very few families use them. Care managers could go a long ways towards helping the family find better and more efficient ways of providing care for a loved one.
The concept is simple. The family hires a professional adviser to act as a guide through the maze of long term care services and providers. The care manager has been there many times. The family is experiencing it usually for the first time.
Planning for long-term care expenses should be a part of everyone's estate plan by the time they reach 50. Here's a piece by Alex Townsend, CLTC of Raleigh on why it may not be a good idea to try self-insure:
Things To Consider:
“How much does someone have to be worth to not need long-term care insurance?”
What’s the magic number? How rich is too rich to not need LTC insurance protection? Even though I think that is the wrong question to ask (see next question), my answer is this: If you can write a check each month, indefinitely, for the kind of long-term care that you and your spouse will desire should you have the need, and it doesn’t bother you to write this check, then you may want to pass on LTC insurance.
“I want a number. Exactly how much does someone have to have to not need LTC insurance?”
My answer is a question. How much does someone have to be worth to not need Major Medical or Medicare Supplement or homeowners insurance? The reason I ask these questions is that we don’t think of other types of insurance in terms of whether we have enough money to not need them. Think about it: There are many wealthy people who could afford to rebuild their home if it burned to the ground, and the likelihood of that kind of total loss is minimal. You may want to take this opportunity to review all your insurance with a critical eye applying sound risk management principles. Perhaps LTC coverage is not the only potentially catastrophic cost you should consider
self-insuring. Assuming that you believe in the value of insurance and you insure for other large risks, why is long-term care insurance the one insurance that you won’t buy? Financially astute people don’t make the best decisions every time, but they also don’t make big mistakes. Most wealthy people don’t like their money to be vulnerable. If you buy LTC insurance and never use it, you might say you’ve made a small mistake. If you don’t buy LTC insurance and need it, you might say it was a big mistake.
- Today’s average cost (2007) in a skilled facility in the Piedmont NC area is approximately $190 per day or $70,000 per year. In 25 years, at a time you’re more likely to need care, if costs rise at just 5% annually, the cost will be approximately $700,000 per year. A need of 3 years would mean $2,100,000 total costs. Regardless of how much money you have, you or your family probably won’t be happy about writing those kinds of checks!
- The above example assumes just one person needs LTC. What if both spouses need it at the same time? I have clients where this is the case. It can and does happen.
- How “liquid” will your assets be at claim time? Which asset will you liquidate first? Will you have to sell an equity that happens to be way down at the time? Will liquidation trigger unwanted capital gains taxes? As you save for the eventuality of needing LTC, what if your health takes an unexpected change for the worse sooner rather than later?
Often, after purchasing a policy, I have had many people tell me that they felt a tremendous sense of freedom, relief, and peace of mind saying things like, “now I can enjoy my money because I have so much more confidence knowing I have a resource in place in case the unthinkable happens”.
Nursing homes are being accused by some patient advocates and state long-term care ombudsmen of increasingly evicting patients who are too inconvenient or too costly to care for. And the most vulnerable appear to be those patients with dementia or highly vocal families who are on Medicaid, according to a recent Wall Street Journal report.
The federal government permits nursing homes to evict patients for specific reasons, such as endangering the health or safety of others and needing care only available elsewhere.
The facilities claim they play by the rules and follow federal guidelines, but an increasing numbers of formal complaints about nursing home discharge practices suggest otherwise.
The U.S. Administration on Aging has seen complaints double from 1996 to 2006. And this doesn’t take into account informal complaints or unreported incidents.
The reason for the increase in nursing home evictions – also referred to as involuntary discharges – appears to be financial. Evicted Medicaid patients are replaced by patients coming out of the hospital who pay a higher daily rate for short-term care and rely on Medicare or private insurance to pick up the tab.
This new focus on short-term recovery and rehabilitation makes good financial sense for facilities. One nursing home chain claims it averages $411 a day from Medicare patients but just $166 from those on Medicaid. As an industry, nursing homes report Medicaid reimbursements are $4.4 billion short of the actual cost of care.
Of course it’s the patients who suffer the most. Elderly and frail, they are transferred to other nursing home facilities, hospitals or psychiatric facilities, where they find it difficult to thrive in a totally new environment. The “transfer trauma” they experience results in mental health problems, weight loss, and frequent falls that can lead to death within months of a change in venue.
In comparison with nursing home patients, assisted living residents have even less protection. Management in assisted living centers can evict residents without reason or appeal process just by giving them one or two month’s notice. Here, too, the U.S. Administration on Aging has seen discharge practice complaints soar over the last decade. Accusations are growing that Medicaid patients are being targeted for eviction and two states are pursuing assisted-living companies on these charges.
Source: To be Old, Frail and Evicted: Patients at Risk. Wall Street Journal, 7 August.
The Problem: Continuing care retirement communities have been growing in popularity with seniors for years. Such communities usually require a "buy-in" upon admittance and many provide for a refund of a portion of the fee upon death. The contracts (often called Residence and Care Agreements or the like) generally provide that the refund will be paid to the estate of the resident. The trouble with this is that the refund triggers probate even if there are no other probate assets. Since the refunds are often hundreds of thousands of dollars, unnecessary probate fees of $1,000 or more often result.
The Solution: For those residents with living trusts, this can be avoided by a simple amendment to the Residence and Care Agreement that provides that the refund will be paid to the resident's living trust rather than his or her estate. The amendment (or addendum, as some facilities call it) must be signed by the resident and the management of the facility.
For those residents without living trusts, the cost of having a trust prepared will generally be at least equaled by the probate cost savings alone, not to mention time and trouble avoided by escaping probate.
A parent’s well being is a growing concern for many adult children who watch as a parent ages and perhaps encounters difficulties which are new to the entire family. The issues an aging parent may encounter can seem overwhelming and a child may not know where to turn for assistance. There are many services adult children can utilize as, or before, needs arise.
At the forefront of most people’s minds is ensuring an aging parent’s day-to-day safety. For some, living at home is still an option, while others may require services that only an assisted living facility can provide. Unfortunately, it is often after an accident where a parent’s safety is at issue that families realize a decision must be made. However, there are steps that can be taken before an incident occurs to ensure an aging parent’s safety and comfort.Continue Reading...